Competition – a friend or foe to patients in the NHS
If the NHS is a customer, and the patient is the consumer, then how does the NHS ensure that the provider is responding to the consumer’s needs, if the patient is not given sufficient choice of providers?
Thank-you very much for the talks. It was great to be engaged in the discussion spearheaded by two prominent people in the field. I also enjoyed the format – such a format I had not experienced before, but it was an excellent way of encouraging participation and debate.
I would also add, however, that not one person commented on competition from the point of view of the patient – i.e. the free market. It is the free market that constrains costs, provides responsiveness to the patients, provides feedback to the doctors and spearheads consumer driven innovation.
The counter arguments for this are always assumed to provide an insurmountable rebuttal and are the question of America and provision for the poor. With regards to the former, America is far closer to the UK model of socialised medicine than we imagine. Their costs have escalated since the Social Security Act of the 1960s and the subsequent HMO acts – i.e. socialisation of their medicine (as well as legislation favouring the corporations over the individual) and their charity sector has been largely put out of business (dealing with the latter). I have yet to see a counter argument to THIS argument (this is also key to understanding why Americans do not want socialised medicine)! A lot of their uninsured are also illegal aliens.
The NHS has failed from an economic and healthcare quality (and I would say moral, although that would be straying into PPE territory which we promised to avoid) model. The NHS had it’s funding doubled under labour, yet it’s productivity remained almost the same and accrued a 20 billion overspend (ignorantly referred to by some as a ‘cut’). The OECD data has Britain languishing near the bottom on ‘non-fabricated measures’ such as cancer survival. A Canadian study put Britain near the bottom again for ICU bed availability. A recent Royal College of Surgeons report stated that death rates for emergency bowel surgery to be 4 times higher than the USA. So, in other words, the sickest (contrary to the myth of no-frills but good quality healthcare) get poor quality medicine.
The NHS is failing in every way the ‘freemarketeers’ say it does. Cost overuns, price inflation, poor quality, care rationing etc. It is a sinking ship, but much like the frog in water, have we realised it?
The models people should be using their ‘google’ button to look for are the Swiss and Singaporean models, where government does not organise care based on a tax-payer funded system, yet people are not dying in the streets as the socialist scaremongers keep on telling us. Furthermore, nobody sensible wants to go from a socialised model to an entirely free market model overnight, but it is about gradual change and allowing patients to decide how to spend their money.
What the two speakers were wanting, was ‘corporatised’ healthcare, where private companies are given relative monopolies (such as the train service which now gets more government money than BR ever did). Given the awful PFI contracts, the clear evidences of cronyism that can occur when government decides what to do with the money of other people – their solution is essentially carrying on in the same direction, but on a slightly different path.
I much enjoyed yesterday’s discussion, particularly the observation that “The NHS needs disruptive innovation, only it wants it without the disruption, which is truly ‘Waiting for Godot.’”
I case anybody is interested, here are the notes I used for my talk. I think that you’ll agree that the quote from Simon Stevens is rather good even if the rest is not.
Competition
A. Communist—phlogiston theory
Stanford Business school studying economics when the Berlin Wall came down
Not a communist under 40, no heart
Communist over 40, no brain
B. Realise that competition is a powerful (the most powerful) for raising quality and reducing cost
Businesses
Sport
Music—Leeds piano competition
Law firms
Science—Nobel prizes
What alternatives?
Julian Le Grand; four ways to run a health service, none of them perfect
Trust, distrust, voice, choice
1. Government directives/targets—waiting lists, distort priorities
2. The law—slow and blunt
3. Professionalism–”Will do what they think best,” which is not the same as what patients think best
4. Public pressure/voice—not very powerful, dominated by middle classes, distorting
C. But with competition need:
Good data on costs, outcomes, and quality—not very available
Smart purchasers—probably not patients, but possibly GPs
Range of providers—often not available
Low barriers to entry, and so new entrants—not very available
D. Michael Porter
The great guru of competition
So why when there is lots of competition in US healthcare (providers and payers) is US health care system so hopeless?
Answer: competition is about the wrong things, mostly price
Everybody trying to do everything—no specialisation
Providers trying to capture everything, limit choice
Payers trying to get ever bigger, so that providers cannot ignore them, have to settle for their prices
So:
Encourage specialisation, probably at disease level—for example, Cleveland Clinic managing CHD; spread around the country (world?)
Pay for value—better outcomes at lower cost
E. So competition in the NHS?
Simon Stevens:
“Would-be doctors compete for the best medical schools. Actual doctors compete for the best NHS jobs. NHS hospitals compete with private practice for consultants’ time, and they compete with non-healthcare employers to retain nurses. General practitioners have partly been competing for NHS patients since 1948. So have hospitals since 1991. Companies compete to provide the NHS with new medicines and diagnostics. NHS researchers compete for grants. The BMJ competes with other medical journals. And the NHS competes with schools, prisons, and the armed forces for public funding.”
So not yes/no—but how much and in what form?
One thing in the policy toolkit
Arguments for
Can increase choice and so quality
Can improve productivity/efficiency
New entrants make a difference—but doesn’t have to mean more private providers
Might avoid need for so much government control and repeated organisations
Arguments against:
1.Management costs up? No bad thing, managing in the NHS is very complex
2.Cherry picking—often the opposite, general practice in Derbyshire,
3.Fragmentation—competition isn’t the opposite of integration, eg, Kaiser in California
G. Evidence—a bit of heresy
One of the main protagonists of EBM and evidence based everything
But can become a wonderful universal excuse—like time, money, confidentiality, security
“Evidence” (RCT evidence) much easier to generate for drugs than complex, system wide interventions like increasing competition
US etc evidence—very hard to generalise to UK
UK—never been much competition, so hard to generate evidence: equivocal and hard to interpret
So not very helpful
H. Conclusion
Role for more competition among providers and even payers/commissioners
Monitor/evaluate carefully
Roshan, thanks for your comments, and Richard for your notes and an excellent talk. In the discussion the buzz phrase was ‘disruptive innovation’, and may be that is putting the patient in control, not clinicians – thereby bringing the customer and consumer together in one place (see my comment above). Surely the desired outcome is that patients get to decide how they want their treatment delivered, having received the best advice – which points to patient budgets. These have been used in social care, and one example was a man who decided that he would prefer to spend one aspect of his budget, not on attending the social centre every day, but going down the pub twice a week. Well if that gave him the required interaction – why not? So we should not assume that the answer to every person’s ailments is the ‘best’ clinical treatment available, but allow the patient decide. Furthermore, patients will migrate to the clinicians they like, so competitive forces will start to play.
Roshan and Justin, I find it interesting that some how you both brushed on the topic of giving control to the patients and patient budgets.
The Singapore health care model is based on a family health budget, contribution coming from salary sacrifices from each family member. This allows a choice for patients about where and when healthcare is delivered, and choosing their prefered clinicians.
Bear in mind it is well culturally accepted by Singaporeans that the government has heavy control on social care amongst many things, which meant there have so far managed to cap cost for the high end side of healthcare. Not sure how we can completely adopt this in the UK, but perhaps definitely a good example of dealing with some of the uncertainties that innovations may come with. Maybe we should explore this more next year.
I note the comments on the Singaporean healthcare model and I have a few comments to make.
The Singaporean model is similar to the UK with some subtle but significant differences. I am from Singapore and what we have is a similar system to National Insurance. If you work you contribute to this account. However, the difference lies in the fact that we all have our own personal accounts (what they have termed Medisave within the state pension scheme) so that it is not put into a shared pool for everyone.Like a bank statement, we get statements of this account regularly. We are not allowed to drawdown on these accounts unless it is for medical purposes (we have similar accounts for buying houses etc so that what effectively is our pension can be used throughout our lives apportioned to the necessities such as housing and medical care.
We can choose then to go to private healthcare or the state run healthcare. It just means that a certain percentage of the treatment can be paid for by your Medisave account. Whether you decide to go for private healthcare or state run healhcare, there will be some amount of payment that has to be made. This seems to be straddling both the American and the UK systems of healthcare.
The Singaporean government has a heavy control on social care in the sense that yes while part of our state pension is apportioned out for medical care (amongst other things) we are also free to choose whether we want to go down the private healthcare route or the state run healthcare route. In that sense, it gives us control of our own budgets for healthcare and we have more freedom to choose who we want to see, where we want to be seen and how. The flip side is that we don’t all necessarily go to one GP as we can see whoever we want to and it is difficult to see a complete history of your medical records.
Having lived in the UK for 6 years now I have found the lack of choice in clinics and doctors difficult. However, I have found that it is improving in the NHS, and I have been allowed more choice than before. It would seem that the NHS is trying to work towards a free market economy for patients and doctors.
The Singaporean government has made a conscious choice to apportion our state pension to cater for certain aspects of our lives and this has been widely accepted in Singapore and has worked thus far. How the British will react to such control I have no idea. Also, one gripe here that the higher tax payers here have is that the money goes into a pool for everyone to take out from. Some require more assistance than others. Individual accounts would seem to motivate individuals more in ensuring that their accounts are well stocked, but again this goes to background and economic situation. The cultural background and economic situation in Singapore lends itself to such a system.
There are some good things about the NHS and maybe “forcing” people into seeing a particular clinic/hospital. All medical records are kept together and seeing a patient would hopefully mean you have all the medical records at hand. If you were to bounce between doctors as you are allowed to in Singapore, something might slip or go amiss and the best healthcare would not be provided. THere is no central records system there and doctors seeing you will either have to work from scratch or try and scrounge together what is hopefully a complete history of your medical records.
Thanks very much for an informative and stimulating session. I’m keen to learn more about the healthcare systems of Singapore, Switzerland and others, as I have formed no view yet as to what competitive structure would best fit the UK. Initially we are going to have agencies directed by Government, commissioning healthcare services from public, private or charitable sector providers – with the private and charitable providers facing significant barriers to entry to the market. My instinct though is that to gain the full benefits of a competitive environment, we will in the end need to give patients the power to purchase directly.
Switzerland’s healthcare costs as % of GDP seem high, at 10.8% (if Wikipedia is to be relied on), and it would be good to understand more about the economic forces at play there.
I look forward to further debate and investigation.